Cyclical Stock, What it is and Why I love itTrading a Cyclical stock can make you some good money if you do it right. They often make huge moves in your favor and bring hug profits in the short term. So what are they? They are simply stocks that make huge moves. They move up fast when the market is going up and they go down fast when the market is going down. Because they move so much they provide a ton of great trading opportunities on either side. A good example of a cyclical stock is US Steel or X. Let’s look back into what it has done in the past. In 2006 US Steel was trading at $47, In the middle of a bull market the stock nearly doubled every year until it was trading at $191 in the middle of 2008. Getting into a short term trade any time during this period would have probably been very profitable for you. Or even trend trading it and holding it for the entire period would have been profitable. 
The reason that most investors consider these kinds of investments “Risky” is because when the market is falling they can be very devastating to hold. And they are right thinking that, for example US Steel has moved from its high of $191 in the middle of 2008 to $17 in 2009. That means the stock fell 91% in just under a year, owe. 
The good news is that if you trade with a short term perspective you would have been able to not only limit your loss if you where in the stock when it started to turn, but you could also have profited from the huge move to the downside by shorting the stock or buying puts. So from a short term perspective these stocks would have made you a killing on the way up and would have made you another killing on the way down. That is the main reason why I love to trade fast moving stocks like this one, especially when the market is trending in either direction.
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